Internet Financial Reporting

The Practice of Financial Disclosure on Corporate Website: Case Study in Indonesia

Sasongko Budisusetyo

STIE Perbanas Surabaya - Indonesia

e-mail: [email protected] or [email protected]

Luciana Spica Almilia STIE Perbanas Surabaya Indonesia

e-mail: [email protected] or [email protected]

Abstract:

The emerging capital market in Indonesia makes investor need more information not only in paper-based financial reporting but the whole information of public company. The Internet is also increasingly important for financial reporting. The majority of the largest listed companies in developed countries now have an Internet website on which they publish financial information. Potentially, the Internet has the power to revolutionize external reporting. Company websites can include the traditional annual reports together with additional financial and non-financial information in multiple formats. The use of multimedia presentational formats also allows corporate information to be presented in innovative ways. The Internet is also increasingly important for financial reporting. The majority of the largest listed companies in developed countries now have an Internet website on which they publish financial information. The purpose of this study was to measure the quality of Internet Financial Reporting of the banking sector and manufacture sector on the Jakarta Stock Exchange. An index was developed by basing closely on the work of Cheng et al. (2000) who had devised their framework from three stages of website financial reporting as identified by Lymer et al. (1999). The index developed by Cheng et al. (2000) tended to favor the importance of technology rather than the content of financial statements. Therefore, in order to add weight to content over technology enhancements, the index criteria were divided into four parts and assigned weights content (40%), timeliness (20%), technology (20%) and user support (20%). Keywords: internet financial reporting, website, traditional financial reporting, internet, financial statement, technology.

Proceeding International Conference on Business & Management

Universiti Brunei Darussalam, 8 9 January 2008

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Introduction

Over the last few years commercial use of the internet in developed

countries has grown at a tremendous pace from scratch up to the point

where few companies do not have a connection or presence on the network.

The internet increasingly considered a comprehensive tool for investor

relation activities. In developed countries, companies use their World Wide

Web (WWW) homepages as platforms to present information and reports.

Corporation throughout the world have increasingly used the internet as a

fundamental mechanism of communication to the extent that their website

has been establishes as a crucial element of corporate image. The technology

revolution, in particular the advent of computer technology, has significantly

impacted accounting practice and accounting communication. The companies

who prepare information in website can benefit from cost savings in printing

and distribution while broadening their disclosures. Users can benefit in a

variety of ways depending on the extant to which the capabilities of the

medium are exploited. Possibilities include enhanced timeliness, ease of

access and search, and improve facilities for data extraction, automatic

comparisons, and analysis. The ability of the medium to handle the reporting

of greatly expanded information fits well with recent calls in accounting for

increased disclosure of a broad range of information.

Internet Financial Reporting (IFR) is voluntary in nature. With no specific

regulations on IFR, there is a disparity of IFR practices among companies.

Some companies disclose only partial financial statement using a low level of

technology, while others disclose full sets of financial reports using

sophistications of the web such as multimedia and analytical tools. The

differences in Generally Accepted Accounting Standards (GAAP) among

different countries are a constraint on company performance comparisons

through the web. There are also potential legal risks which may constraint

company use of IFR and equally for users, real time data as non audited

financial information may lack the reliability of the traditional paper based

financial report.



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The purpose of this study was to measure the quality of Internet Financial

Reporting of the companies on the Jakarta Stock Exchange. An index was

developed by basing closely on the work of Cheng et al. (2000) who had

devised their framework from three stages of website financial reporting as

identified by Lymer et al. (1999).

Previous Research

Ismail (2002) examine the extent of financial information disclosed on

the internet by the Gulf Co-operation Council (GCC) countries. In this

research using forward stepwise in logistic regression was undertaken to

assess whether voluntary dissemination of financial information on the

internet was related to firm size, leverage, and profitability. The result of this

research show that the profitability of a firm to publish financial information

on the internet does not only depend on Individual characteristic, but on a

combination of interaction effects among firm characteristics (size, leverage,

and profitability), industry type and country.

Oyelere, Laswad, and Fisher (2003) examine the voluntary adoption of

the internet as a medium for transmitting financial reports and determinants

of such voluntary practice by New Zealand companies. The result indicate the

some determinants of traditional financial reporting such as firm size,

liquidity, industrial sector and spread of shareholding are determinants of

voluntary adoption of internet financial reporting (IFR). The other findings of

this research show that the other firm characteristic such as leverage,

profitability and internationalization do not explain the choice to use the

internet as a medium for corporate financial reporting.

Wagenhofer (2003) examine two major economic effects created by the

internet for financial accounting and disclosure. First, the internet changes

the costs of information processes and with it the demand and supply of

financial information in capital markets. Second, internet financial reporting

creates a demand for standardization, which has been taken up with the

development of XBRL. It is argued that while XBRL is designed to standardize



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only the format of information, it will also standardize contents. Finally, the

issue of assuring high quality Internet Financial Reporting.

Andrikopoulos and Diakidis (2007) examine the characteristics and the

determinants of internet reporting practices of companies listed in the Cyprus

Stock Exchange. The research approach was based upon the construction of

an Internet Reporting Index that captured the content of disclosure with

respect to financial and corporate governance information. Exploring the

potential explanatory power of long-established determinants of voluntary

disclosure they found that a companys size significantly affected the extent

of internet disclosure, whereas other traditional explanatory factors, such as

profitability and leverage did not have any significant effect on the disclosure

practices of the companies listed in the Cyprus Stock Exchange.`

Davey and Homkajohn (2004) reviews an empirical study into the

extent and quality of Internet Financial Reporting (IFR) among the Top 40

Thai listed companies. By measuring the IFR of the top 40 Thai Companies is

was shown that, while most companies in the sample had websites and

provided financial data on their sites, Thai companies still lag behind those in

other advanced economies in communicating with stakeholders via electronic

means. Most companies did not take full advantage of the computer

technologies to add value to the financial disclosures. Most companies

employ a rather conventional web presentation, with text and static graphics,

equivalent to a paper presentation. In addition, there is substantial variation

in the quality and extent of Thai firms IFR practices. Some firms provide a

full set of annual reports, while some ones present only summary financial

statement. Quality pertaining to timeliness also varied with just as many

firms providing timely data, as those who present outdated information.

Trabelsi, Labelle and Laurin (2004) examine the impact of Internet

Financial Reporting (IFR) on financial accounting theory by incorporating it

into the general Gibbins, Richardson, and Waterhouse (GRW) disclosure-

management framework. Trabelsi, Labelle and Laurin (2004) find that the

financial information disclosed in Traditional Financial Reporting (TFR) , as

compared with website disclosures of a random sample of Canadian



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companies, documents a significant differences between TFR and IFR as well

as a wide variability among the sample firms in their use of IFR content,

format, and technology. Trabelsi, Labelle and Laurin (2004) interpret this

variability in the incremental difference of IFR over TFR as an indication that

a firms ritualistic or opportunistic behavior under IFR is not different from its

behavior under TFR. The strength of this conclusion is limited by the fact that

we did not control for the firms TFR disclosure positions, which are

unobservable, other than by considering the incremental information

disclosed under IFR over TFR.

Internet Financial Reporting (IFR)

Internet financial reporting (IFR) is a recent but fast-growing phenomena.

Many companies worldwide publish their corporate financial information on

the internet. Financial information provided on the web includes

comprehensive sets of financial statements, including footnotes; partial sets

of financial statements; and/or financial highlight that may include summary

financial statements or extracts from such statements.

By placing financial information on the firms website, users can search,

filter, retrieve, download, and even reconfigure such information at low cost

in a timely fashion. But Internet Financial Reporting (IFR) is not restricted to

static texts and graphs. It allows for hyperlinks, search engine, multimedia,

and interactivity (Lymer, 1999). Even more use of interactivity would be a

dialogue reporting by which users could specify information demands based

on information they received previously.

Firms can learn from tracking users information requests or specific user

demands, which users can pose either anonymously or by filling in some kind

of access identification. Access statistics are market-driven direct measures

of the importance of information, and if interpreted carefully, can guide firms

and also standard-setters to react to the demand revealed by the users

behavior. Software applications offered by a preparer on the internet could

allow firms to learn assumptions investors in analyzing financial data.



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The internet may also improve the availability of financial information

within firms themselves. For example, many of the processes that occur in

distant places can be automated and fed into a firm-wide information

system. Reporting and consolidation is improved and speeded up (fast

close). One opportunity is to increase reporting frequency from annual or

quarterly to monthly, daily, or even (almost) instant financial statement. The

internet is a perquisite for high-frequency reporting, as the information

should be provide immediately after the announcement release and will lose

value fast if delivered to users too late relative to the length of the periods it

covers. A consequences of more frequent reporting could be that the users

focus on quarterly earnings may vanish, and with it the incentives of firms to

manage them. However, it would require a major change in most accounting

systems because events, such as updates of market prices, estimates,

judgments, would need to be entered on real-time basis as well. Of course,

economic questions such as the optimal length of a reporting period emerge,

but are not yet well understood (Wagenhofer, 2003).

Benefits, Issues and Future relating to Internet Financial Reporting

The advantages of IFR give rise to a number of issues, which include

blurring the line between audited and unaudited information, equity and

efficiency of access, introduction of errors, security and integrity of the

information, and other professional issue.

Internet reporting blurs the distiction between current financial

information used by management and the historical (and audited)

information made available to the public (Hodge, 2001). This reporting may

supersede the historicaly audited information currently made available to

shareholders and the companys broader constituencies by providing financial

information used by management.

Cost Savings. Cost savings from the reduction of production and

distribution associatiade with print-based annual reports and incidental

requests from non-shareholder financial statement users is one of the main

benefits from providing financial report on the internet. Internet reporting



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improves users access to information by providing information that meet

their specific needs, allowing non-sequential access to information through

the use hyperlinks, interactive and search facilities, and alowing the

opportunity for providing more information than available in annual reports.

This improved accessibility of information results in more equitable

information dissemination among stakeholders.

Easy Access. Investor-related financial and business information is

often maintained in a separate section of the companys Web site and is

easily accessible from its home page. Most companies that provide more

than a minimal amount of financial data on their Web site have esthablished

a separate section to capture the information and often title it Investor or

Investor Relations. These investor sections usually contain at least the

folowing types of information: quarterly and annual financial reports,

financial history, SEC filings, stock quotes, press releases, information

request forms, other shareholder information. Many companies have found

that providing an easily navigable investor relations section on their Web site

has significantly reduced the number of phone calls requesting standard

information such as annual reports.

Financial Commentary. A number of companies have expanded their

offering of financial and business data via the Internet to include information

that was historicaly prepared primary for analysts and institutional investors,

thereby making it more easily accessible to a wider audience. Examples of

such offerings include: management presentation transcripts and slides,

transcripts or audio archives of conference calls, presentations to analysts,

and other meetings, online company factbok, earnings commentary and

investor relations calender of events. Providing those data via the internet

not only increases the speed of distribution to analysts and institutional

investors, but it also makes the information more easily accessible to

individual investors and other interested parties.

Analytical Tools and Portable Data. In presenting their financial and

business data, some companies have utilized formats and tools designed to

assist the user in reviewing, analyzing, and using the information. For



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example, companies sometimes incorporate formats or features in the Web

version of their annual report that make it easier to use, such as: linked table

of contents, hyperlinks that connect items to other relevants sections of the

report and to other relevant documents, and multiple file formats (for

example PDF and HTML). As another example, site sometimes provide

praphics and other tools to allow the user to view the companys stock price

history for a selected period or to look up the companys closing stock price

on a specific date.

In some Web sites, a downloadable data feature allows the user to copy

data into the appropriate word processing application or a spreadsheet

application. At least one company also provides analytical tools to assist its

users in summarizing and analyzing the companys historical financial data

and in modeling projected earnings. Based on the comments of some

companies interviewed, providing those tools helps to promote greater usage

of a companys Web site by saving re-keying time and effort for those

interested in analyzing the data.

Receiving the most up-to-date information as quickly as

possible. To assist interested parties in receiving the most up-to-date

information as quickly as possible, many companies allow Internet users to

sign up for e-mail alerts. Depending upon the company, users who sign up

for this service receive newsletters, press releases, and other updates via e-

mail. In other cases, users receive a message in their e-mail box whenever

the company posts certain new information to its Web site. Companies have

found that such e-mail alerts help to minimize or replace the more expensive

use of mass fax to distribute information.

Site Activity Monitoring. Some companies regularly monitor usage of

the investor relations section of their Web site to identify ways to improve

site efficiency and increase usage. Companies not only monitor the total

number of hits but also collect data indicating the usefulness of the different

types of information included on the Web. In addition, those companies often

use recurring information requests, informal feedback, and a review of other

Web sites to identify investor data needs that can be better met through



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electronic distribution. This information is then utilized to identify suggestion

for improvements to increase site traffic and ease of use.

Research Method

The purpose of this study was to measure the quality of Internet

Financial Reporting of the banking sector on the Jakarta Stock Exchange. An

index was developed by basing closely on the work of Cheng et al. (2000)

who had devised their framework from three stages of website financial

reporting as identified by Lymer et al. (1999).

The index developed by Cheng et al. (2000) tended to favor the

importance of technology rather than the content of financial statements. For

example, a company that disclose a full set of financial statements in pdf

format for one year could gain only 6%. This score to be too low when

compared with the usefulness of the content. Therefore, in order to add

weight to content over technology enhancements, the index criteria were

divided into four parts and assigned weights content (40%), timeliness

(20%), technology (20%) and user support (20%). Three new items were

added to the checklist, namely company address, and language, under

content, and proper disclaimer under timeliness. IFR disclosure instruments

are content, timeliness, technology and user support.

Content, this category includes the components of financial information

from statement of financial position, cash flow through shareholder

information and social responsibility disclosures. Financial information

disclosed in html format scores higher (2 points) than disclosure in pdf

format (1 point), since the former makes better use of the web technology

and as a result it is easier for users to access effectively. A copy of the

content index is attached as Appendix 1.

Timeliness, since the web can provide information in real time it is

important to find out the extent to which this facility is utilized. These real

time data include press release, unaudited latest quarterly results,

vision/forward-looking statements, and charts of future profits forecast. For

disclosure of press releases and stock quotes, there is an added score for the



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recently of information (on a scale from 0 to 3). Companies receive a score

for disclosing unaudited quarterly results and vision statements and a score

is also given for appropriate disclaimers. This is included since companies

may face potential legal risk if they endorse the unaudited or forward looking

statements and omit meaningful cautionary disclaimers. A copy of the

timeliness index is attached as Appendix 2.

Technology, these item related to enhancements that cannot be

provided by printed reports. Those items that uphold that quality of the

electronic financial reporting and facilitate communication with site users

score highly on the index. The elements are download plug-in on spot, online

feedback, use of presentation slides, use of multimedia technologies (audio

and video clips), analysis tools (for example, Excels Pivot Table), advanced

features (such as implementing an Intelligent Agent or XBRL). A copy of

the technology index is attached as Appendix 3.

User Support, users computer skills are different. Some of them are

experts, some are novice. Those who do not have state-of-the-art technology

may find themselves unable to use a site at all. Companies score is higher if

they implement tools that facilitate use of the IFR irrespective of computer

skills. The tools scored in the index are: search and navigation tools (such as

FAQ, links to homepage, site map, site search), number of clocks to get

financial information (on a scale from 0 to 3), and consistency of web page

design. A copy of the User Support index is attached as Appendix 4.

Result

Of the 23 listed banks, web sites were not identified for four ones. Thus

19 (82.61%) of the 23 listed banks were evaluated. The IFR index scores

ranged from a low of 22% to the highest score of 64.50% with average sore

of 44.34%. Only 4 banks (21.5%) scored more than 50%.



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Table 1. IFR Disclosure Scores

% Sore No. of Banking % of Sample

100 - - 90 99 - - 80 89 - - 70 79 - - 60 69 1 5,27% 50 59 5 26,32% 40 49 6 31,58% 30 39 5 26,31% 20 29 2 10,52% 10 19 - - 0 9 - -

The current state of the 19 sample banks web site is discussed, based

upon the checklist, which is divided into 4 categories, namely, content,

timeliness, technology and user support.

Content

All of the sample in the survey had financial reports on their websites,

although these appear in very different forms. Of the 19 banks, 13 (68.42%)

ones provided a complete set of period financial statement, namely annual

reports and quarterly reports. All of bank use Indonesian version to inform

their information and 11 banks (58%) use bilingual version (Indonesian and

English version). The number of banks in the sample that provide complete

content of financial reporting on their websites is shown in table 2.

Table 2.

IFR Content Disclosure Scores

% Sore No. of Banking % of Sample

41 - 50 0 0 31 40 1 5% 21 30 10 53% 11 20 8 42% 0 10 0 0

Timeliness

The number of banks in the sample that provided timely information on

their website is shown in table 3.



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Table 3. Disclosure of timely information

Timeliness No. of banks

Press releases 17 89% Unaudited Latest Quarterly Results 18 95% Stock Quote 8 42% Vision Statement Existence 18 95% Disclaimer 0 0% Charts 3 16%

The most frequent item of disclosure on corporate websites was the

Unaudited Latest Quarterly Result, Press Release and Vision Statement,

being disclosed in 89% - 95% of the websites . This was not particularly

surprising since press release are generally text only document that can be

added to the websites without alteration or format subject. The final item in

the timeliness category is the vision statement. Most of banks in the sample

disclosed descriptive statement about future profit forecast or trends for the

banks performance.

Technology

As most banks in the sample provided their annual report in pdf format

it was not surprising that most banks allowed the users to download pdf files,

so that they could obtain financial information of the banks without any

trouble. The result showed that direct e-mail contact and mailing list were

quite common around 74% of the banks in the sample allowed the users

send e-mails to the banks.

In terms of presentation slides, 3 (16%) banks used presentation slide

to present their annual meetings or companies profile. Audio or video

presentation of annual meetings, press gatherings or analyst conferences

were generally not available on the sample companies websites. In only of

few cases (1 or 5%) did banks in the sample offer selections of corporate

presentations, speeches at annual general meetings or addresses from

analyst conferences.



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Although the report in digital from provides investors with the

opportunity to download files that can be used as input in computer-based

analysis at very low cost, it is rather surprising that only 1 or 5% of the

banks in sample provided analysis tools or allowed users to download data

for analysis. One reason for the reluctance to allow users to create their own

financial analyses may be an unwillingness to provide more information than

can be found in the traditional paper-based reporting.

Table 4. Technology provided on bank website

Technology No. of companies (%)

Download plug-in on spot 0 0% Online feedback 14 74% Presentation slides 3 16% Multimedia technology 1 5% Analysis tools 1 5% Advanced features (XBRL) 0 0%

Although XBRL is emerging, and its benefits are quite obvious, such as

shortening implementation times and alleviating errors, no companies in the

sample were found to be using the XBRL format to create their website.

User Support

The type and number of user support facilities on the companies

websites are shown in table 5. Even though FAQ is useful for companies in

reducing the number of incoming e-mails, there are 14 (74%) banks in the

sample offered FAQ on their websites. In this category, links to homepage

and links to top were assessed. All of the banks in the sample provided a

link to homepage on their websites, there are 14 (74%) banks provided a

link to the top. This may be because many companies present their annual

report in pdf format, which is incompatible with this technology. A site map is

very useful as it can show the structure of the website on just one page.

However, there are 14 banks provide site maps on their websites. Relatively

most banks (74%) provided a site search instrument on their websites.



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Table 5. Technology provided on bank website

Technology No. of companies (%)

Help & FAQ 14 74% Link to Home Page 19 100% Link to Top 14 74% Site Map 14 74% Site Search 14 74%

Summary

Due to the dynamic business world, traditional paper-based corporate

reporting is becoming less timely and thus less useful to decision makers.

Firms must improve their communication strategy to be more efficient. With

electronic-based reporting, the confines of the paper based reported are

removed. The companies as the preparers can benefit from cost saving and

improve their financial reporting strategies. The users can benefit by getting

financial information in more breadth and dept. However, a significant benefit

for the information consumers of Indonesian banks, is that the users can

obtain financial information more easily than before.

By measuring the IFR of the 19 go public banks in Indonesia it was

shown that, while most go public banks in the sample had websites and

provided financial data on their sites. The survey findings show that the

nature of IFR disclosure varies considerably across the sample banks. The

variations in the content of the websites suggests that firms had different

reasons for establishing an Internet presence. Some banks website contain

only product and service advertising. Most financial reporting is confined to

pdf, which looks exactly like the paper-based annual reports. Apart from the

lower cost consideration, this may be because the firms would like to protect

themselves from legal risk in the event of providing uncorrected financial

data to the users.

Most of the banks in the sample do not take full advantage of the

computer technologies. Only one banks allow users to download financial

information or provided analysis tool for users to make their own analyses.

The common technology feature provided by the banks is the download plug-

in spot, but none of the banks in the sample provided download plug-in spot.



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Another common feature is online feedback. None of the banks used

advanced futures (XBRL) to create their websites.

With respect to user support, most go public banks index their investor

relation section on their homepages, so it relatively easy for the users to find

their financial information. The linkage that most of the companies provide is

a link to homepage. However, link to top, site search and site map are

uncommon features. The majority of the banks website were well-organized

in terms of page layout and font type.

In Indonesia, firms are using IFR to supplement their traditional

corporate reporting practice and engaging in IFR voluntary. Indonesian

security regulation currently do not require firms to disseminate financial

information on the internet. The lack of formal guidance and the huge

differences in the nature and extent of reporting on the web are likely to

raise issue concerning the comparability and reliability data. The national

standards setters and regulators of accounting practices will not be able to

continue to treat financial reporting on the internet as identical to traditional

distribution channels of corporate data. The Indonesia government or other

regulatory bodies should decide to introduce guidelines that provide both

corporations and information users with a framework within which the

exchange of data can take place with maximum of efficiency.

This study is restricted to the 19 go public banks listed on the Jakarta

Stock Exchange in Indonesia during the study. So, conclusions at this stage

should be restricted to go public banks disclosure and the same conclusion

may not necessarily hold for the other sector not only in banking.



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References Andrikopoulos, Andreas and Nickolaos Diakidis, 2007, Financial Reporting

Practices on the Internet: The Case of Companies Listed in the Cyprus Stock Exchange, Published Working Paper \\http:www.ssrn.com.

Craven, B. M., and C. L. Marston, Financial Reporting on the Internet by

Leading UK Companies, The European Accounting Review, Vol. 8 No. 2, pp. 321-333

Davey, Howard and Kanya Homkajohn, 2004, Corporate Internet Reporting:

An Asian Example, Problems and Prespectives in Management, Vol. 2, pp. 211-227

Deller, Dominic, Michael Stunbenrath and Christoper Weber, 1999, A Survey

on the Use of the Internet for Investor Relations in the USA, the UK and Germany, The European Accounting Review, Vol 8 No. 2, pp. 351-364

Hedlin, Pontus, 1999, The Internet as a vechile for Investor Relations: The

Swedish Case, The European Accounting Review, Vol 8 No. 2, pp. 373-381

Hodge, F., 2001, Hyperlink Unaudited Information to Audited Financial

Statements: Effects on Investor Judgements, The Accounting Review, 76(4), pp. 675-691.

Ismail, Tariq H., 2002, An Empirical Investigation of Factors Influencing

Voluntary Disclosure of Financial Information on the Internet in the GCG countries, Published Working Paper \\http:www.ssrn.com.

Lymer, Andrew (Ed), 1999, Special Section: The Internet and Corporate

Reporting in Europe, European Accounting Review, Vol. 9, pp. 287-396.

Oyelere, Peter, Fawzi Laswad and Richard Fisher, 2003, Determinants of

Internet Financial Reporting by New Zealand Companies, Journal of International Financial Management and Accounting, 14: 1. pp. 26-63.

Trabelsi, Samir, Real Labelle and Claude Laurin, 2004, The Management of

Financial Disclosure on Corporate Websites: A Conceptual Model, Canadian Accounting Prespectives, Vol. 3 No. 2, pp. 235-259.

Wagenhofer, Alfred., 2003, Economic Consequences of Internet Financial

Reporting, Schmalenbach Business Review, Vol 55 October 2003.



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Appendix 1. The Content Index of IFR Disclosure Instruments

Index Items Explanations Score Multiplier Max 1. Component of Financial Information

1.1. Statement of Financial Position

Pdf 1 = Yes, 0 = No 1 1 1

HTML 1 = Yes, 0 = No 1 2 2

1.2. Statement of Financial Performance Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2

1.3. Statement of Cash Flows Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2

1.4. Statement of Movement in Equity Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2

1.5. Notes to the Financial Statement Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2

1.6. Disclosures of Quarterly Results

Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2

1.7. Financial Highlight/Year-in-Review Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2 Growth rate, ratios, charts 1 = Yes, 0 = No 1 2 2

1.8. Chairmans Report


1.9. Auditors Report Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2

1.10. Stakeholder Information


1.11. Corporate Information Pdf 1 = Yes, 0 = No 1 1 1

HTML 1 = Yes, 0 = No 1 2 2

1.12. Social Responsibility Pdf 1 = Yes, 0 = No 1 1 1 HTML 1 = Yes, 0 = No 1 2 2

2. Number of years/quarters Shown



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Annual Report No. of years 1 0.5 2 Quarterly Report No. of quarters 1 0.5 2

3. Past Information (HTML Only) Annual Report 1 = yes, 0 = no 1 1 1

Quarterly Report 1 = yes, 0 = no 1 1 1 Graph of Share Price 1 = yes, 0 = no 1 2 2

4. Language English 1 = yes, 0 = no 1 2 2 Other than English or Indonesia

1 = yes, 0 = no 1 1 1

5. Address (HTML only)

Company Address 1 = yes, 0 = no 1 1 1



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Appendix 2.

The Timeliness Index of IFR Disclosure Instruments

Index Items Explanations Score Multiplier Max 1. Press Releases

Existence 1 = Yes, 0 = No 1 2 2 Number of days since last updated news

See note 1 1 1 3 Note 1: Press Release

2. Unaudited Latest Quarterly Result (3 = updated on the date of investigation) Existence 1 = Yes, 0 = No 1 2 2 2 = 1 week or

less before the date of investigation

With proper disclaimer

1 = Yes, 0 = No 1 1 1 1 = 2 weeks or less before the date of investigation

3. Stock Quote (0 = news is updated more than 2 weeks ago)

Existence 1 = Yes, 0 = No 1 2 2

Updated in how many hours

See note 2 1 1 3 Note 2: Stock Quote

4. Vision Statement/Forward Looking Statement (3 = updated every hour or less)

Existence 1 = Yes, 0 = No 1 2 2 2 = update every day or less

Proper disclaimer 1 = Yes, 0 = No 1 1 1 1 = updated every week or less

Charts of future profit forecasts/trends

1 = Yes, 0 = No 1 1 1 0 = updated every week or less



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Appendix 3. The Technology Index of IFR Disclosure Instruments

Index Items Explanations Score Multiplier Max

Download Plug-in On Spot

1 = Yes, 0 = No 1 2 2

Online Feedback 1 = Yes, 0 = No 1 2 2 Use of Presentation Slides

1 = Yes, 0 = No 1 2 2

Use of Multimedia Technology

1 = Yes, 0 = No 1 3 3

Analysis Tools 1 = Yes, 0 = No 1 4 4 Advance Features (XBRL)

1 = Yes, 0 = No 1 5 5



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Appendix 4. The User Support Index of IFR Disclosure Instruments

Index Items Explanations Score Multiplier Max

Help and Frequently Asked Questions

1 = Yes, 0 = No 1 2 2

Link to Home Page 1 = Yes, 0 = No 1 1 1 Link to Top 1 = Yes, 0 = No 1 1 1 Site Map 1 = Yes, 0 = No 1 2 2 Site Search 1 = Yes, 0 = No 1 2 2 Note 3: Number

of Clicks to get to financial Info

Number of Clicks to get to Financial Info

See note 3 1 1 3 3 = 1 clicks

Consistency of Web Page Design

0 = poor, 1 = fair, 2 = good

1 2 4 2 = 2 clicks

Internet Financial Reporting

Documents

Transcript of Internet Financial Reporting